Why Buy Singapore Executive Condominiums ( ECs )?

Reasons to Buy ECs?

• ECs are priced 15% to 20% lower

• No ABSD payable or HDB upgraders

• Price subsidies - CPF Grant and lower land cost on EC land

• Singapore Citizens Enjoy Family Grant of up to $30,000

• Deferred Payment Scheme (DPS) Available - Pay 20% down payment and 80% deferred till TOP

• No 2nd loan restriction - Up to 75% loan to value (LTV) for upgrader

• Condo lifestyle living with full condo facilites at lower entry price as compared to condominium

• Asset Progression - using properties overtime to grow your wealth

• No Ethnic Restriction When Buying or Selling

• No Seller Stamp Duty - All owner occupied estate with 5 years minimum occupation period (MOP)

• Buy 1st Sell Later for upgrader without ABSD incurred

• Special Bridging Loan - Unlock existing HDB Flat value

• EC comes with 5 years MOP and 10 years privatized.

• No subsidy recovery ( No clawback ), unlike HDB Prime and Plus model upon selling.
  

Are you preparing to set up a home with your partner for the First Time ( First -Timer, or are you an existing HDB Flat owner planning to move for the second time ( Second-Timer )? Perhaps you are caught between the options of a HDB flat and a Private Condominium, or your income is too high for a HDB Build-to-Order (BTO) flat, yet you are not financially ready for a private condominium. Perhaps we can get some understanding of Executive Condominium (EC) before deciding to buy a EC.

The basics of Executive Condominiums (ECs)?

Unlike HDB flats, ECs are built by private developers and come with a full range of facilities similar to private condominiums. The land for ECs is sold as public housing by HDB and purchasers must meet the HDB-EC eligibility criteria before buying. ECs are a unique property type in Singapore. Starting as public housing for the first 10 years and then becoming privatized as private condominiums.

Let's examine the general 9 criteria you need to meet before booking an EC.

1. Family Nucleus

You need to apply as a family nucleus under one of these schemes :-

• Public Scheme

You form a family nucleus with any of the following :-

- You and your spouse and children ( if any )

- You and your parents and siblings ( if any )

- You and your children under your legal custody, care and control ( for widowed or divorced persons )

- You and your siblings who are orphans and single, ie. unmarried, divorced or widowed persons may apply for an EC unit with the following criteria :

Note : If the care and control of your children under the age of 21 is shared with your ex-spouse , you must obtain his/her written agreement before you can list your children in the application.

Note : Divorced or widowed persons who have children and can form a family unit will not qualify

             to buy a unit as orphaned siblings.

• Fiancé/Fiancée Scheme

- You form a family nucleus with your spouse-to-be

- You must produce your marriage certificate for inspection by the Developer , within 3 months after taking possession of the EC unit.

- Written parental consent is needed if spouse-to-be is 18 years old and above, but below 21 years old .

The person can only be listed as an essential occupier in the EC unit application.

Written consent from the person's parents must be submitted during the EC selection appointment.

- Special Marriage Licence is needed if spouse-to-be is below 18 years old.

- If you and your fiancé or fiancée have been given a CPF housing Grant, you must produce your marriage certificate for inspection by the Developer before you can take possession of the EC unit.

- If you and your fiance or fiancee have broken off the relationship and will not be able to submit your marriage certificate, or if the marriage is later annulled, you will not be eligible to buy the EC unit.

- Upon termination of the Sale and Purchase Agreement, the Developer will be entitled to impose forfeiture amount equivalent to 5% of the EC unit's purchase price in accordance with the Sale and Purchase Agreement.

- If you have been given a CPF Housing Grant, you will have to return the CPF Housing Grant together with the interest accrued.

• Orphans Scheme

You and your siblings ( those applying ) are orphans and single ( unmarried, divorced or widowed )

- All the siblings that are single must be listed in the same application

- At least 1 of the deceased parents was a Singapore Citizen or Singapore Permanent Resident.

Note : Under the Orphans Scheme, siblings are not allowed to buy or rent flats separately.

• Joint-Singles Scheme

You and up to 3 other co-applicants , and all of you are :-

- Single ( unmarried, divorced, or widowed )

- Singapore Citizens

- At least 35 years old

- Applying jointly as co-applicants

Note : The CPF Housing Grant for singles is not available

2. Citizenship

- Main applicant must be a Singapore Citizen.

- At least one other member of the family nucleus in the application must be a Singapore Citizen or Permanent Resident ( applicant or essential occupier )

- For Joint Singles Scheme application, all applicants must be Singapore Citizens

3. Age

- All applicants must be at least 21 years old at time of applying of EC

- All applicants under the Joint Singles Scheme must be at least 35 years old.

4. Monthly Household Income Ceiling

- The total Income of all persons listed in the EC application must not exceed $16,000.

Note : People listed in the application must remain in the application as well as during the

minimum occupation period ( MOP ) after the EC unit purchase

5. Ownership / Interest in property in Singapore or Overseas other than HDB

- You do not own other property overseas or locally, or have not disposed of any within the last 30 months.

You are considered to own or have an interest in a property if you have acquired a property through purchase or when it is :

• Acquired by gift;

• Inherited as a beneficiary under a will or from the Intestate Succession Act;

• Owned or acquired or disposed of through nominees ; or

• Acquired by holding on trust for another person/entity.

Note : A private residential property includes but not limited to a house, building or land that is under a residential land zoning( including land with multiple land zoning [1], Executive Condominium (EC) unit, privatised HUDC Flat and mixed use development [2].

[1] E.g. residential with commercial at 1st storey or commercial and residential.

[2] E.g. properties with a residential component such as HDB shop with living quarters.

Note : Non-residential property is a property under a non-residential land zoning and/or the permitted use does not include housing.

6. Payment of Premium or Resale Levy

- If you previously bought a new flat from HDB, Design, Build and Sell Scheme (DBSS) flat or Executive Condominium (EC) from a developer, or received a CPF Housing Grant, you need to pay a resale levy when you purchase your next home (EC)

- If you are a Single Grant recipient, you will only need to pay half the resale levy amount when you subsequently form a family and buy a second subsidised flat (EC).

7. Ownership/Interest in HDB flat

- If you or any persons listed in the EC application owns or has an interest in any HDB flat, you must dispose of the flat within 6 months of completion of the EC unit purchase.

8. Undischarged bankrupt

- Prior consent must be obtained from the Official Assignee (OA) or the private trustee for the purchase of an EC unit.

- You do not need to seek prior consent from the OA or the private trustee if you are listed as an occupier of the EC unit.

9. Wait-out period before applying to buy an EC unit from a property developer

Cancellation of application after booking a flat from HDB

- If you have booked a flat from HDB and subsequently cancel your flat booking, you must wait out a 1 -year period from the date of cancellation before you may apply or be listed as a core occupier to buy an EC unit from a property developer.

Termination of Sale and Purchase Agreement for a EC unit

- If you had previously bought an EC unit from a property developer with a CPF Housing Grant and subsequently terminated the Sale and Purchase Agreement, you must wait out a 5-year period from the date of termination before you may apply or be listed as a core occupier to buy an EC unit from a property developer.

Owners/Ex-owners of a EC Unit bought from a property developer

- If you currently own or have recently disposed of your ownership in an EC unit, you must wait out a 30-month period from the date of disposal of the EC unit before you may apply or be listed as a core occupier in an application to buy another EC unit form a property developer, subject to other eligibility conditions.

Pros and Cons of an Executive Condominium (EC)

Pro Con

- 25% -35% cheaper than a private - Income ceiling up to $16,000.

condo Those higher are not eligible

- Enjoy up to $30,000 CPF Housing - Must qualify under one of the

Grant depending on your total HDB eligible schemes

household Income

- Gets the premium facade and - Mortgage loan only from Bank, facilities of a private condominium not from HDB and you must

pay at least 25% down payment in cash/CPF

- Get private property status after - Same as HDB BTO,. Need to 10 years fulfill 5 years MOP before selling

While the amenities and benefits of an EC make it as one of the best choices for Singaporeans today, there is no point having a dream home that force you to cut corners to pay off your home mortgage.

Before you decide to buy an Executive Condominium, I would suggest you go through the following steps 1st:-

1. Eligibility Check - to make sure you are eligible to buy an EC

2. Financial Assessment - to make sure you are buying within your budget

3. Visit the EC showflat - to understand more first

4. Shortlist and Purchase a unit - only when you have gone through the above 3 steps

Note : Shortlisting the right unit to purchase is very important as it may affect your exist strategy in future.

If you have any questions about buying an EC, or if you need assistance on the above steps, please feel free to get in touch with me